A recent article in the Daily Business Review highlights October as the anniversary month when the home foreclosure mess became a certified nightmare. Around this time in 2010, the Office of the Comptroller of Currency and the Federal National Mortgage Association basically asked the people responsible for the mortgage mess to police themselves and conduct self-audits to make sure their paperwork was legal.

Carelessness, neglect and an utter disregard for proper procedures is something Oppenheim Law has come to expect from the mortgage industry.

So it is no surprise that mortgage servicers might have turned once again to robo-signing in order to foreclose on homes, according to Reuters. This time it’s because the original documents don’t even exist!

During the housing boom, over half of all mortgages issued were pooled together and sold by lenders to investors. When the lenders sold the mortgages, they were supposed to physically sign and endorse the mortgages over to the investors. In the rush, however, lenders simply overlooked the paperwork.

One of the best examples is New Century Mortgage, the second largest subprime lender until it collapsed in 2007. There are indications that New Century didn’t endorse almost all of the mortgages it sold to investors. A sampling of 50 mortgages in Duval County revealed that not a single of them was properly endorsed. Such oversights mean that it is difficult to pin down who actually owns a mortgage and that investors potentially paid lenders billions of dollars for nothing.

The former head of the FDIC, Sheila Bair, advocated for a widespread investigation to determine the extent of this robo-signing problem. Other regulators, however, don’t want to pick at the problem because they’re scared of what they might find and the resulting damage it could cause the housing market.

The problem could be good news for the homeowners who are facing foreclosure proceedings based on one of these notes. Issues with notes can extend the time a foreclosure takes to run its course and thus give homeowners valuable time. The problem does not, however, fully absolve a homeowner. If the mortgage note was not properly transferred, then the original bank still owns the mortgage and can foreclose on the home just like it would with any other house. The problem is, of course, that the owner of the note might not exist anymore or might be in bankruptcy themselves.Continue reading→

Oppenheim Law would never accuse the banks of committing fraud, perjury, impersonation, notary fraud, contempt of court, lying, violating Constitutional protections, or being tax cheats. Nevertheless, we do make this advisory: Be careful of what you sign.

Why?

As soon as you think the coast is clear, it’s the return of the robo-signers.

Suspected robo-signed documents are cropping up again in county deed records, according to the Associated Press. These new documents suggest the previous document mill scandals are part of an endemic problem at banks, not a one-off affair like the banks would have you believe.

In explaining the document mill scandals, banks claimed they were crushed by a gigantic amount of paperwork. It was while attempting to deal with such a large amount of paperwork that “mistakes” were made, according to the banks. Such claims are now being met with a raised eyebrow.

Registrars in several states have reported seeing suspicious documents. But now, the banks can’t claim they are under a mountain of paperwork: foreclosures, sales, and refinances are all at lower levels than they were in the past several years. Most of the documents under suspicion now are not even related to foreclosures. Rather, they mostly deal with new home purchases and refinances.

The banks are even using some of the exact same names heavily publicized when the scandals first broke like Linda Green and Crystal Moore. Such behavior points to an industry that sees itself as untouchable: too big to fail and too big to be regulated.

The proposed settlement between the banks and the states includes no criminal charges. Critics say that such slaps on the wrists only foster a culture of impunity, and they appear to be right.Continue reading→

“This case is a symbol of the crisis,” said Oppenheim, whose Weston, Florida law firm is representing the Kachkos. “It’s a system that’s run amok. All the rules of civil procedure are being flushed down the toilet.”